Figures for third quarter office take-up in 2018 are not yet in, but it is interesting to look at how the first half of the year performed. Broker JLL has produced its Brussels Office Market report, with at least two key factors: low take-up and the continuing rise of co-working.

As was the case for the first quarter of the year, says JLL, the second quarter was very quiet, returning 76,599 sq.m. of take-up, which is, 8.9% less than in the first quarter and 43.7% less than a year ago.
Take-up year-to-date for the first half thus came in 27% lower year-on-year to 160,668 sq.m.
JLL counted 78 transactions in Q2, vs. 100 in Q1 and 94 one year ago, so the average deal size declined by 32% y-o-y to 903 sq.m.

As in the first quarter and last year, during the second quarter of 2018 co-working made the headlines with additional transactions recorded, the largest of which being the prelet by Fosbury & Sons of 7,500 sq.m. in the redevelopment of Le Dôme, the former headquarters of Actiris in front of the Brussels Stock Exchange in the Pentagon. Welkin & Meraki added a second location in 3-month time in the European district by selecting the Artemis Square building.
Co-working operators recorded 29,335 sq.m. of transactions this year-to-date, which represents 18% of total take-up, but while local co-working start-ups’ demand is picking up, UK-based Orega announced that it would close its two hubs in Brussels only a few years after opening. The exit of Orega from Belgium is more a strategic decision, as both units have performed relatively well.

Corporates contributed to 78% with no real sector dominance apart from co-working. With a share of 8% in total take-up, international administrations were more active than usual on the demand-side with two transactions in the European District. The Belgian Representation to the European Union is moving to AXA’s Belliard 65 and will occupy 4,535 sq.m. Simultaneously, the 5,922 sq.m. it is leaving in Colony House (Rue de la Loi) has already found a taker with the German Representation to the European Union. This opportunity was particularly attractive to Germany as its embassy is located just behind.
Belgian administrations contributed to the tune of 14%, signing a few small to mid-size transactions in the second quarter, of which 3,400 sq.m. was by the COCOF in the Congrès Building (Pentagon).

While still waiting for confirmation of the third quarter, JLL does however believe that 2018 so far looks very much like the disappointing 2015 that lacked deals in excess of 10,000 sq.m. The broker expects the yearly take-up to total around 300,000 sq.m., which is well below the 418,000 sq.m. recorded in 2017.

Looking further forward, JLL has some better news. There is an enormous transaction pipeline coming from Belgian administrations scheduled over the coming years. The Brussels Capital Region has launched a call for tenders for 47,000 sq.m. and the Flemish Community is looking for c. 60,000 sq.m.
The SNCB / NMBS has launched a public call for tenders to develop an 80,000 sq.m. new headquarters along the South Station on the former site of the Tri Postal. The SNCB / NMBS will then either acquire or lease long term the new building, and leave 5 obsolete buildings representing a total volume of around 200,000 sq.m. And Finally, the European Institutions have officialised their future needs: 25,000 sq.m. for a new conference centre, 100,000 sq.m. replacement needs by 2025.
These transactions are likely to come to fruition in the 2019 to 2020 period.